Britons are failing to take steps to protect their income and families, with more than half of people not having any life insurance, a study has suggested.

Despite the fact that 97pc of people know what life insurance is and understand the importance of having the cover, only 44pc of people have actually taken out a policy, according to insurer Scottish Widows.

People are even less likely to have critical illness cover, with 86pc saying they know what the policies cover, but just 12pc having taken one out, while only 7pc of people have income protection insurance, despite 83pc being aware of the product.

The insurer found that one of the main barriers to people taking out cover to protect their income or provide a lump sum if they died was that they thought they could not afford it, with 23pc saying this was the main barrier to them having life insurance, and 26pc saying cost stopped them from taking out critical illness cover.

Instead, people rated other things as being more important, with 69pc of people saying broadband was essential to them, while 55pc felt the same way about their mobile phone, compared with just 35pc who said ensuring they were financially secure if they could not work was a top priority.

But when asked how they would cope if they or their partner lost their income, 44pc of people said they would have to make cuts to their general expenditure. A further 43pc of people said they would rely on their savings to cover their costs, but 58pc admitted that they had less than £2,500 set aside or had no savings.

Clive Allison of Scottish Widows said: "Our research shows that the majority of people clearly understand the benefits associated with protection products such as life, critical illness and income protection, but that many still don't adequately protect themselves, their families and their homes.

"The industry still needs to do more to highlight these benefits to ensure take-up increases, especially in an environment where welfare provision is being eroded, and the Government is promoting the need for greater self-reliance."